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KEY ENERGY SERVICES INC filed this Form 8-K on 10/28/2011
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Capital Expenditures and Liquidity
Capital expenditures were $67.8 million during the third quarter 2011 and $245.9 million through the first nine months of the year. Key’s consolidated cash balance was $19.3 million, and total debt was $746.6 million as of September 30, 2011, compared to $14.6 million cash and $572.6 million total debt as of June 30, 2011. As of September 30, 2011, there was $324.5 million utilized under the Company’s $550 million senior secured credit facility. Subsequent to the third quarter, Key reduced borrowings by $25.0 million, and the Company currently has $250 million available under its credit facility.
Edge Acquisition
On August 5, 2011, Key completed its previously announced acquisition of Edge Oilfield Services, LLC and Summit Oilfield Services, LLC (collectively, “Edge”) for total consideration of $307.6 million, consisting of approximately 7.5 million shares of Key common stock and $189.7 million cash.
Overview and Outlook
Commenting on the results, Key’s Chairman, President and Chief Executive Officer, Dick Alario, stated, “In addition to activity increases from our participation in the growing horizontal shale well markets, we experienced an increase in traditional well repair and workover activity in our core markets.
“Our international business continues to strengthen. We were recently awarded another 2-1/2 year, $90 million contract with PEMEX, and we intend to deliver at least six additional rigs to Mexico during the fourth quarter 2011 to support this contract. We have seen strong evidence of increased customer demand for our services in certain foreign markets in the Middle East and Latin America.”
Alario continued, “For the fourth quarter 2011, we anticipate that results from operations will be roughly flat sequentially, as a full quarter of Edge results essentially offset typical seasonal declines. While it is still early in our customers’ budgeting process, based on recent discussions with our largest customers, we expect both domestic and international activity to remain strong in 2012.”
Conference Call Information
Key management will host a conference call to discuss its third quarter 2011 financial results on Friday, October 28, 2011 at 10:00 a.m. CDT. To access the call in the U.S. and Canada dial 888-794-4637. International callers should dial 660-422-4879. All callers should ask for the “Key Energy Services Conference Call” or provide the access code 14042906. The conference call will also be available live via the internet. To access the webcast, go to and select “Investor Relations.” A telephonic replay of the conference call will be available on Friday, October 28, 2011, beginning two hours after the completion of the conference call and will remain available for one week. To access the replay, call 855-859-2056 or 800-585-8367. The access code for the replay is 14042906. The replay will also be accessible at under “Investor Relations” for a period of at least 90 days.